Medicaid Expansion Plan Will Add 92K in W.Va.

May 2, 2013

CHARLESTON, W.Va. (AP) - West Virginia will expand Medicaid as called for by the federal health care overhaul, through a plan unveiled Thursday by Gov. Earl Ray Tomblin that would extend coverage to an estimated 91,500 uninsured low-income residents.

The decision follows a financial analysis that concluded that more than $5 billion in promised federal funds will cover nearly all of the resulting costs over the next decade. But with Medicaid already squeezing the state budget, the report also calculates that West Virginia's share of the burden during that time will increase by $375 million.

That's prompting Tomblin to pursue several cost controls: Medicaid will cover mental health and substance abuse treatment through managed care, an alternative to the traditional fee-for-service arrangement; and some patients will face copayments based on income.

Expanded coverage would begin Jan. 1, 2014, while enrollment would open Oct. 1. Tomblin was one of just two Democratic governors who had yet to choose whether to expand Medicaid, leaving Gov. Steve Beshear of neighboring Kentucky as their party's last holdout. President Barack Obama is deeply unpopular in West Virginia, and the state's Republican Party attacked Tomblin over his expected decision even before he announced it.

Thursday's decision also arrives in the wake of another audit commissioned by Tomblin. That report contrasted West Virginia's glaring health problems with massive spending and numerous problems at the Department of Health and Human Resources, which oversees Medicaid. The audit found West Virginia ranked 48th among states for overall health care outcomes, and rated among the worst for obesity, diabetes, adult smoking and heart disease deaths. The agency that oversees Medicaid, the Bureau of Medical Services, meanwhile has 1.4 percent of the department's workforce to handle a program that already costs $3 billion - 72 percent of its budget.

U.S. Sen. Jay Rockefeller, D-W.Va., joined Tomblin for Thursday's announcement at Charleston's St. Francis Hospital along with chief executives of several hospital systems. Expanding Medicaid is expected to help the state's hospitals, which face a scheduled in federal reimbursement payments, by providing coverage to thousands of residents now treated at hospitals without compensation as charity care. The financial analysis cites studies estimating the annual savings to hospitals at $20 million to $30 million.

CCRC Actuaries conducted the analysis, enlisting a Massachusetts Institute of Technology economist and other specialists to measure the benefits and pitfalls of expansion. It also found that expanding Medicaid should help both employer-based health plans and private insurance premiums. State employers face penalties, estimated at between $6 million to $18 million per year, if they drop health coverage and send employees to the federal law's insurance exchange. That marketplace aims to offer private insurance coverage by allowing participants to pool their buying power. Employers would avoid penalties if Medicaid could cover their workers instead.

The analysis concludes that expanding Medicaid while following other provisions of the federal health care law eventually will reduce the ranks of the state's uninsured from 246,000 West Virginians to around 76,000.

The federal health care law calls on states to extend Medicaid benefits to people who make less than 138 percent of the federal poverty line. That's about $32,499 for a family of four. With one of the strictest limits among states, West Virginia now bars adults from enrolling if their household earns just one-fourth of that - $8,240 for a family of four.

As a result, half of the West Virginians on Medicaid are blind or disabled. Nearly 20 percent are children, while a slightly larger portion is seniors. But West Virginia still has the 12th-largest Medicaid program among the states when measures as a percentage of its population, with around 330,000 residents covered according to federal figures.

Medicaid already covers some recipients through managed care, and Thursday's plan would extend it to more existing patients and those who join through expansion. Similar to health maintenance organizations, or HMOs, found in private insurance, managed care requires each patient to choose or be assigned a primary care physician. They then have access to services from a network of health care providers and facilities, with their main doctor referring them to specialists. These patients must secure prior approval before receiving certain testing and procedures, or if they wish to seek services outside of the provider network.